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Month: October 2014

As I promised last week, I want to share another interesting insight from Reinventing Organizations, specifically about culture.

Laloux found an interesting application to Wilber’s “four quadrants” model in the context of organization culture. Wilber argues that in order to fully comprehend a phenomenon we must look at it from four different facets: objectively from the outside (objective, measurable) but also sense it from the inside (thoughts, feelings); look at it in isolation (individual dimension) but also in its broader context (collective dimension).

Sounds abstract to borderline useless. But then Laloux waves his magic wand of practicality and turns it into something useful:

Laloux argues that in order to fully comprehend an organization, we must look at four things (left 2×2): people’s beliefs and mindsets; people’s behaviors; the organizational culture; and the organizational structures, processes and practices. This is demonstrated with an example from an “achievement paradigm” organization (middle 2×2). Finally, in order to help shape the emergent culture of the organization, three avenues can be pursued (right 2×2): putting supportive structures, processes and practices; ensuring that people with moral authority role-model the behavior associated with the culture; and inviting people to explore how their personal belief system supports or undermines the culture.

A final interesting insight that Laloux shares is that often times, the reason that culture is so hard to maintain, is because it is at odds with the other three facets of the organization. For example: maintaining a culture of empowerment within a hierarchically structured organization…

Reinventing Organizations by Frederick Laloux is so far the best book I’ve read in 2014. Which is worth noting given that I average about 20-30 non-fiction books a year.

Laloux applies a developmental psychology lens to looking at organizations. As it turns out, every major shift in the way we, humans, viewed the world, was accompanied by major innovations in the way we collaborate and work together, as summarized by the (modified) table taken from the book below:

The vast majority of organizations today operate under an “achievement” paradigm, but a shift from “achievement” to “pluralistic” is already a noticeable trend in the industry. Laloux, however, chooses to focus on the next paradigm shift: from “pluralistic” to “evolutionary”. He studied an impressive set of organizations who have already made or are in the process of making the paradigm shift, and distilled the commonalities into three major innovations: self management, striving for wholeness, and evolutionary purpose.

But not stopping there is what turns this book from an average to a very good one. For each of these innovations, Laloux provides detailed descriptions of how the core organizational structures, processes and practices change as a result. From decision-making, through hiring, firing and promoting, all the way to the squishy topic of organizational culture (I’ll cover the latter in a separate post).

For example, he provides some of the most inspiring and detailed descriptions of self management, a term that often gets aimlessly thrown around in agile environments. In the process, he debunks, through real examples rather than theory, some of the most common misconceptions around this concept, like the belief that the lack of hierarchy automatically means that there’s no structure, no management and no leadership.

The book does have its weaknesses. The forward, by Ken Wilson, is the worst part of the book and almost made me miss out on a phenomenal read. Referencing the organizational paradigms by their colors rather than their one-word descriptions was distracting at best. But most importantly, organizations with long and deep value chains, like software companies, are not getting a lot of attention in the study and the book. Laloux acknowledges in the appendix that they require certain adaptations, but Holacracy, the one known “operating system” for such organizations, is only covered anecdotally in the book.

As an aspiring evangelist of Laloux’s thesis, the things that I’m missing the most are shorter materials that I can use to pique the interest of a boarder yet-to-be-engaged audience, for which reading a 300+ page book is asking too much. A 10-page HBR-like article or a 20-min TED-like video talk will be great.

I think I’m getting close to coming full-circle on Holacracy. At first I was totally psyched by how radically innovative it is; then the skeptic in me kicked in and it seemed more like an idealistic framework that can never work in a large scale organizations. But the more I study it and similar approaches, it resonates with me more and more. I’m not ready for a full “why is Holacracy awesome?” post, but I do want to focus on one aspect of it that can potentially stand on its own merits:

Reaction Round – each person can react to the proposal as they see fit. No discussion or responses.

Amend & Clarify – proposer can optionally clarify the intent or amend the proposal based on reactions. No discussion allowed.

Objection Round – The Facilitator asks each person in turn: ”Do you see any reasons why adopting this proposal would cause harm or move us backwards?” (an “Objection”). Objections are stated, tested, and captured without discussion; the proposal is adopted if none surface.

Integration – The goal is to craft an amended proposal that would not cause the Objection, but that would still address the proposer’s problem. Focus on each Objection, one at a time. Once all are integrated, go through another Objection Round.

Beyond the meta-benefit of a repeatable, structured, decision-making process the two things that I like the most about this are:

Separating getting clarify on the proposal, giving everyone an opportunity to be heard (react) and dealing with material objections into three separate activities. They address three separate needs for the people who are engaging with the proposal and deal with each one separately.

Defining a valid objection as something that would “cause harm or move us backward”. This is typically where consensus-based decision making tends to fail. And also somewhat related to Fred Wilson’s recent post on satisficing – by setting an agreed-upon acceptable threshold for proposals, we can avoid some of the major pitfalls that cause important decision-making processes to stall.

Ethan’s main thesis is this: there’s a big hype around transparency in some management circles, but too much transparency can lead to counter-productive behaviors. He then outlines four boundaries/distinctions that can help strike a better balance between transparency and privacy.

Something in the way the thesis is presented really rubbed my the wrong way. I believe that transparency is a means to an end, not an end on its own. It’s a prerequisite condition to healthy, high performing organizations. But without other supporting mechanisms, it cannot drive the change that most organizations seek on its own and will often time lead to the type of counter-productive behaviors described in this article.

Ethan identifies four types of boundaries that require thoughtfulness and attention in order to reap the benefits of transparency:

1. Boundaries around teams – limit the scope of transparency to the team but not necessarily beyond it

2. Boundaries between feedback and evaluation – limit the “uses” of transparency, it should be used for feedback but not for evaluation

4. Boundaries around time – limit transparency to certain periods of time, allowing more privacy in the others

I buy into #2, but I think that #3 has hardly anything to do with transparency, and #1 and #4 are only attempting to cure specific symptoms of #2.

When transparency is used for performance evaluation, it is used as a control mechanism. The kind of behaviors that organizations are trying to encourage with transparency can only be triggered when coupled with at least one other key component – trust. Transparency without trust is close to worthless.